Home Services Myth: I would have gotten these new customers anyway!
A HOME SERVICES STUDY
We have just completed a comprehensive study in the Home Services Vertical for a client of ours and found something that debunks the industry standard. We designed a very controlled analysis utilizing our proprietary engagement and profiling programs to determine the revenue impact on a small Home Services company in a small market.
Although we can’t honestly say that we were surprised by the results, but we were surprised by the magnitude of the results. So, let’s go over the controls and parameter of this study.
Description of Subject of Study: Home Services Company, less than 50 employees, in the 32nd largest market in US, highest priced products and services in market, advertises good customer service rating in market, industry average follow-thru with inquiries, study conducted during self-proclaimed “worst time of year”, sub $10M annual revenue. Company only takes on residential business within a defined service area. Company provides home services in AC, Heating, Plumbing, Electrical and Water Treatment. Active call center with very good local reputation. Selling most major brands of equipment. BBB gives an A+ rating, Google 4.7, Yelp 4.5, Facebook 4.7 and Yahoo 4.5.
Goal of Study: Increase company revenue during slowest time of year.
Scope of Study: Five months (150 days), full social media program, TV and radio advertising, 6547 website visitors over five months with a 62% bounce rate for about 20 real website visitors per day. Engagement platform was staffed by highly trained and compensated HVAC sales professionals (average experience was to have sold over $200K in HVAC equipment) including mechanical engineers, ex-hvac technicians and other technical sales professionals with a post graduate degrees.
Qualifications of the Studier: www.Convertan.com is a nationally recognized and premium engagement sales firm operating out of Denver, Colorado. Analyst Staff includes data executives from Microsoft, IBM, AT&T, P&G, and USAF Military Intelligence. Testing protocol comes from software used from University of Colorado Graduate business school and only contains 1st party data. Clients include Microsoft, Nordstrom, Tommy Bahamas, The Dwyer Group (dozens of stores in several divisions), CenterPoint Energy, Invisalign Providers, Cosmetic Surgeons, Auto dealerships, Healthcare offices and multiple S&M businesses. Annually Convertant interacts with over 32 million website visitors and affects over $2.8B in revenue for our clients.
Convertant interacts with over 32 million website visitors each year
What happened in study: During the 150-day study, the company received from Convertant over 22 requests for a new ac/furnace install at an average install price of $17,283 along with 112 service requests worth about $587 per request. If all of these opportunities had closed that would be a total of $ 445,970 worth of new business. There were also 4 large commercial accounts that this client ignored.
There was a 98% positive customer satisfaction rating of the service provided by Convertant and the average duration of interaction was increased from 1 minute and 56 seconds to a 10 minute and 33 second encounter with each prospective customer. This is a 446% increase.
Convertant provided company with not only a transcript of the actual interaction, but also the statement of need, contact info (full name, number, email, physical address), sense of urgency and set time of appointment/installation date. Typical Convertant clients can close with this information at about an 82% rate. Typical HVAC industry closes at less than a 10% rate.
What we found out for company: Convertant was able to determine the decision driving factors for this company’s customers. We found out and confirmed what the actual competitive pricing was in the marketplace. We found out what current and new customers liked and disliked about the company. And we found out what the gaps were, and the areas of improvement were for our client company.
Convenience of doing business surpassed pricing!
What surprised us: In this study, we found out that the overwhelming number of initiated engagements, about 98%, were from random searches (on Google, Bing, Firebox, etc.) looking for an HVAC company in the local region. Indicating that the was not pre-determined preference and the clear majority of potential customers had not become aware or influenced by any other conventional advertising sources.
98% of new website traffic never heard of you…before their Google search!
Only 7 of the 6,547 website visitors entered the url of the company during their search. These were new customers looking for new services from a new provider without any preconceived ideas about the vendor.
In no time in history have customers had the ability to price-check a dozen different companies in the span of a few minutes …capturing their mindshare has become paramount to closing business!
Study Conclusion: Product and service differentiation has become very difficult when utilizing common marketing and advertising techniques. Trying to use old tools in a new market is perilous as the Home Services Industry(HIS) has always had a low barrier to entry, and is now being dominated by Google and Amazon search engines. You can guess where they are going with this.
Almost every HIS participant uses a templated website claiming intangible like “Reliability, Trustworthiness, Convenience, and Locally Operated” common messaging in an oversaturated and tired market.
This is clearly a “race to the bottom” as value and differentiation is being commoditized and pricing becomes paramount. In no time in history, have customers had the ability to price-check a dozen different companies in the span of a few minutes. Just ask the travel agency companies. This is of particular interest due to the common myths often heard that the company would have gotten these new customers by just spending more on their convention low performing marketing campaigns. This has been a misnomer in this industry for several years.